Indian entrepreneurs and investors expect the penalty imposed on search giant Google by the country’s competition regulator on Thursday to ease what they term as the American company’s stranglehold over local digital businesses.

The Competition Commission of India (CCI), which slapped a fine of Rs 136 crore on Google, ruled that the company “indulged in practices of search bias” which harms both competitors and users.

“It is a milestone verdict,” wrote Vijay Shekhar Sharma, founder of India’s largest mobile payments company Paytm, in a post on microblogging site Twitter. “Sending billions of tax free $ out of India and blocking Indian startups to build solutions for India. That’s Google for you!” tweeted Sharma, whose company competes with Google’s digital payments service Tez.

While the quantum of the fine “maybe a pittance” for the global media giant, the ruling has stirred hope of a more level playing field for Indian digital startups that are feeling the heat from Google’s dominance of online search. The ruling is regarded as particularly significant as the American giant prepares to expand services across areas ranging from payments to food delivery in India.

“The Google Play store too should be a level playing field,” said Rahul Khanna, managing partner at Trifecta Capital, a venture debt firm, which has backed startups such as hyper-local services provider UrbanClap, grocery seller BigBasket and furniture portal Urban Ladder.

“No one is regulating the likes of Google and Facebook on how they present content because they are monopolies. So having global regulatory bodies or guidelines to regulate such global digital media companies is key to ensure a level playing field,” said Rahul Khanna of Trifecta Capital.

About half a dozen leading entrepreneurs that ET spoke to welcomed the judgement, but declined to be identified fearing the impact on their business relationships with Google.

“Google is an innovative company which offers pioneering products. However, our contention is to ensure that (it) does not abuse its scale and other advantages to the detriment of the Indian Internet ecosystem and customers,” said Murugavel Janakiraman, founder of Matrimony. com.

While the CCI order said Google abused its dominant position on three counts that largely relate to search, it found no foul play in the case of advertising.

Chennai-based Matrimony.com had filed an appeal in the state high court against Google, contesting the need to pay for trademarks in a bid to boost traffic in 2012, the same year when the appeal was made to the CCI as well.

That case in the state high court is still underway and a verdict is awaited.

SHOT IN THE ARM

Entrepreneurs whose businesses compete with Google believe the CCI order, which came after an agonising six-year wait, is a shot in the arm for digital businesses and will encourage Indian startups.

In its ruling, the competition regulator cited existence of search bias where Google privileged its own vertical while delivering results for searches on airline flights. Google Flights competes with local travel portals such as Make-MyTrip, Cleartrip and Yatra. The CCI order noted that it “amounts to an unfair imposition upon users of search services as it deprives them of additional choices”.

This ruling, said entrepreneurs, will have ramifications on Google’s treatment of other verticals as well. Legal experts are of the view that the Competition Act allows for aggregators in various verticals — that compete with Google — to claim compensation from the search giant for the loss in traffic.

“The significance of this order is that both the majority and minority have found Google to be dominant, and once you are dominant, you have special responsibility in the competition law,” said Naval Chopra, partner at law firm Shardul Amarchand Mangaldas, which represented Matrimony.com before the CCI.

“Google has spent a lot of time trying to dispute the fact that it has this special responsibility and that it is dominant,” he said.

The CCI order, say legal experts, lays the foundation for a level playing field and makes Indian startups aware of their rights.

GOOGLE EXPECTED TO APPEAL

Google is expected to appeal against the CCI order. “The Competition Commission of India has confirmed that, on the majority of issues it examined, our conduct complies with Indian competition laws. We are reviewing the narrow concerns identified by the commission and will assess our next steps,” a representative for Google said in response to detailed queries from ET.

Digital entrepreneurs also cite the need for self-regulation. “Both Google and Facebook enjoy a duopoly, where they can dictate who sees what and how often. It is on them to ensure that the algorithms don’t discriminate,” said Sattvik Mishra, cofounder of ScoopWhoop, a digital media and news startup backed by Kalaari Capital.

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